UK slaps Google Search with special market status, making way for stricter regulations

The Competition and Markets Authority (CMA) of the United Kingdom has officially classified Google with a unique status in the online search market, which will empower the regulator to impose stricter regulations on the tech giant. This designation, referred to as 'strategic market status,' indicates that Google holds a dominant and entrenched position in search and search advertising, necessitating special regulatory measures to foster fair competition. In a detailed report, the CMA pointed out that Google has maintained an unrivaled position in the digital search landscape for a considerable time. Comparatively, other general search providers, such as Bing, have remained significantly smaller, with Bing capturing less than 5% of search queries and advertising. The CMA noted that no traditional search provider has substantially increased its market share relative to Google in over fifteen years. While this designation does not imply any current evidence of wrongdoing by Google, it serves as a precursor to further inquiries and potential interventions aimed at reshaping how Google administers its search services within the UK. The scope of this designation includes Google’s search features, advertising services, as well as its AI-driven tools, like AI Overviews and AI Mode. However, it notably excludes the Google News app and search syndication services. The CMA has also indicated that it will reassess the designation's applicability to Google’s Gemini AI assistant due to the evolving landscape of AI in search. A public consultation regarding possible regulatory interventions is expected to take place later this year. This move comes after a thorough nine-month investigation initiated earlier in the year, following the establishment of the UK's new digital markets competition regime in January. The focus of the investigation was to determine if Google was fostering weak competition, creating barriers to entry and innovation, favoring its own services over third-party offerings, and potentially using consumer data without proper consent. Among the potential enforcement actions outlined by the CMA are initiatives aimed at allowing UK residents to choose and switch search engines easily, implementing systems for data portability, ensuring fair ranking of search results, and enabling consent mechanisms for Google’s AI services. In response, Google has expressed concerns that any ensuing interventions could stifle innovation in the UK, asserting that the country has benefited from timely access to cutting-edge products and services without imposing heavy restrictions. The company emphasized that overregulation could hinder growth and lead to increased costs for consumers.